Fifteen families of beavers have been given the permanent "right to remain" on the River Otter in East Devon.
The decision was made by the government following a five-year study by the Devon Wildlife Trust into beavers' impact on the local environment.
The Trust called it "the most ground-breaking government decision for England's wildlife for a generation".
It's the first time an extinct native mammal has been given government backing to be reintroduced in England.
Environment minister Rebecca Pow said that in the future they could be considered a "public good" and farmers and landowners would pay to have them on their land.
Beavers have the power to change entire landscapes. They feel safer in deep water, so have become master makers of dams and pools.
They build complex homes - known as lodges or burrows - with underwater entrances.
The River Otter beaver trial showed that the animals' skill replenished and enhanced the ecology of the river catchment in East Devon.
They increased the "fish biomass", and improved the water quality. This meant more food for otters - beavers are herbivores - and clearer and cleaner water in which kingfishers could flourish.
Their dams worked as natural flood-defences, helping to reduce the risk of homes flooding downstream.
The evidence gathered by researchers during the trial helped the Department for Environment, Food and Rural Affairs to make what it called its "pioneering" decision to give the beavers the right to live, roam, and reproduce on the river.
Beavers were hunted to extinction 400 years ago for their meat, furry water-resistant pelts, and a substance they secrete called castoreum, used in food, medicine and perfume.
In 2013 video evidence emerged of a beaver with young on the River Otter, near Ottery St Mary. It was the conclusive proof of the first wild breeding beaver population in England.
It was a mystery how they came to be there. Some suspect that the creatures were illegally released by wildlife activists who, on social media, are called "beaver bombers".
The beavers faced being removed. However, the Devon Wildlife Trust, working with the University of Exeter, Clinton Devon Estates, and the Derek Gow Consultancy, won a five-year licence to study it.
Now there are at least 50 adults and kits on the river - and they are there to stay.
Peter Burgess, director of conservation at DWT, said: "This is the most ground-breaking government decision for England's wildlife for a generation. Beavers are nature's engineers and have the unrivalled ability to breathe new life into our rivers.
Environment minister Rebecca Pow visited one of the stretches of river where the beavers are active. She said that the project, "was so important because it is informing how we think in the future."
She described beavers as a "natural management tool", and said that having them on land could be seen as providing a public benefit for which farmers and landowners could get paid, under the new subsidy system once the UK leaves the EU.
She said: "In our new system of environmental land management, those with land will be paid for delivering services, such as flood management and increased biodiversity.
"Using beavers in a wider catchment sense, farmers could be paid to have them on their land."
While the future of the River Otter beavers is now secure, it's not clear what will happen to other wild populations across England.
There is evidence that beavers are active on the River Wye, the River Tamar, and perhaps also in the Somerset levels.
Beavers were reintroduced to Scotland a decade ago, and last year they were made a protected species. However, farming leaders raised concerns about the dams flooding valuable agricultural land.
Last year, Scottish Natural Heritage granted licences to cull around a fifth of the beaver population.
Mark Owen, head of freshwater at the Angling Trust, said: "There remain serious concerns around the impact the release of beavers could have on protected migratory fish species, such as salmon and sea trout."
He said that the trust was "saddened that the minister has decided to favour an introduced species over species already present and in desperate need of more protection".
Those involved in the beaver trial believe that any wider reintroduction project needs careful management. Prof Richard Brazier, from the University of Exeter, said the activities of beavers help to lock up carbon, along with increasing biodiversity.
The rodents are also encouraging "wildlife tourism" with people wanting to spot them bring in welcome revenue to the local economy.
He said: "The benefits of beavers far outweigh any costs associated with their management."
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